The annual world wide volume of electronic payments made by consumers exceeds $300 billion and is growing at a rate four times faster than that of the world's gross domestic product. These transactions are enabled by over six billion bank-issued plastic cards (“bank cards”) either of the magnetic stripe card or the integrated circuit card (“IC card” or “smart card”) type. Although far from immune to risks of fraud and identity theft, the convenience of transactions based on bank cards, and the role of trusted issuers in guaranteeing settlement of such transactions, have gained the cards widespread acceptance from consumers and many merchants.
The security model of transactions based on bank cards has several distinguishing characteristics: (1) card owner authentication is based on one or more of a personal identification number, signature or biometric identification; (2) the critical personal information of the card's owner (e.g., the owner's personal identification number or PIN) is transmitted to the issuing institution via an authorized merchant's terminal, but is not retained by the merchant or any other third party; and, (3) bank cards and bank card readers are compatible with banking industry specifications for security and interoperability, including those maintained by EMVCo LLC and the Payment Card Industry (PCI).
Conventional terminals operable with bank cards for electronic funds transfer at the point of sale (“EFTPOS terminals”) tend to be relatively complex, large and heavy. Even “portable” wireless EFTPOS terminals are substantially larger and more expensive than popular modern electronic devices such as cell phones, PDAs and personal MP3 players. This is partly because conventionally designed portable EFTPOS terminals have integral means to produce contemporaneous paper receipts and to provide for long range wireless communications. More importantly, however, conventional EFTPOS terminals have failed to take advantage of the modern interne and wireless communications infrastructure.
The high cost of conventional EFTPOS devices make them unaffordable for many small merchants and service providers. Other mobile professionals, who may find the devices affordable, reject them as unacceptably bulky, heavy or difficult to use. These businesses and professionals and their customers and clients are disadvantaged by the resulting need to transact payments by cash or check.
Moreover, conventional EFTPOS terminals are limited to payment acquisition tasks, and do not support other types of secure transactions that could be advantageously performed using a bank card security model. For example, managing personal financial accounts, or accessing medical, insurance or governmental information, or engaging in on-line gaming and auctions, generally require access at least to a computer terminal or to a proprietary, secure network for adequate security.
Finally, the existing systems within which conventional EFTPOS terminals operate delegate responsibility for compliance with local regulations and standards to the physical terminal. This means that a single terminal is not generally operable in multiple countries.
What is needed is a highly portable, low cost personal terminal that permits secure transactions of many types operable in multiple locales.